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The concept of utility computing has been talked about for years. But for many enterprises, the actual deployment of utility computing services is relatively new and untested. That’s likely to change in the years to come as organizations learn of the potential benefits of utility, or “on-demand,” computing.

With utility computing, resources such as computation and storage are delivered by a service provider via the Internet as fee-based services much like public gas and electric utilities. Capacity is purchased and used as needed, so companies have the flexibility of adjusting computing power based on demand.

A survey of 288 organizations with 1,000 or more employees, released in June 2007 by research firm In-Stat, showed that 27 percent of the organizations have adopted a utility computing service. Of those organizations that don’t currently contract for utility computing services, 27 percent indicated that they’re “extremely” or “very” interested in exploring the benefits of utility computing within the next two years, In-Stat says.

The firm found that larger enterprises are generally more likely to be adopting or interested in utility computing than smaller companies, says Jeff Jernigan, r esearch analyst at In-Stat. O f those organizations that use utility computing services, 95 percent said they would recommend using them to a colleague, Jernigan says.

“ The benefits for both current users and for those [that are] interested revolve around perceived cost benefits, not necessarily ‘dial-up/dial-down’ capabilities or the alleviation of power and space concerns — benefits usually associated with utility computing,” Jernigan says.

Organizations that said they were not interested in utility computing cited a perceived lack of return on investment benefits, lack of confidence in third-party providers, and fear of losing control of their computing environment.

Despite these concerns, utility computing appears to be destined for future growth. Gartner Inc., in a report released in October 2007, identified 14 alternative delivery models, including utility computing, that the firm says “will completely transform the IT market in the next five years. Advancements in technical areas are presenting a scenario that offers new ways to deliver, package and procure IT, and these alternative delivery models have the potential to dramatically change how IT is accounted for. IT leaders must examine these models, or business units may implement these solutions without them.”

Gartner identifies several key benefits of the utility approach to IT, says Claudio Da Rold, vice president and distinguished analyst at the firm. These include the ability to access services much more quickly than if they were built internally; the lower costs made possible by accessing a standardized, shared IT service; the flexibility enabled by the pay-per-use model as compared with front-end investments and fixed costs; and the expected high quality of the services in terms of availability and response time.

But Gartner acknowledges there are risks related to utility services. These include system failures that can affect data integrity or availability; security risks of exposing data to unauthorized people; external access to data that could result in loss of confidentiality, integrity or availability; and legal or regulatory compliance issues.

Still, indications are that the utility model will be increasingly popular as organizations look for more ways to be agile in a fast-changing business environment.

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